Partnership with Botanix Labs

Botanix Labs, the team behind the EVM-compatible Bitcoin Layer 2 solution, Spiderchain, is integrating Chainlink’s data feeds. This integration aims to facilitate inter-blockchain communication within the EVM landscape.

• Chainlink Scale Program: As part of this collaboration, Botanix is joining the Chainlink Scale program, which provides gas grants to help onboard new blockchains and cover the initial operational costs of their oracle networks.

Cross-Chain Interoperability

Spiderchain is also adopting Chainlink’s Cross-Chain Interoperability Protocol (CCIP), designed to enable programmable transfers of tokens and data across various blockchains.

• Quote from Chainlink: Johann Eid, Chief Business Officer at Chainlink Labs, stated, “Botanix is the first Bitcoin layer-2 to join Scale, marking a significant step in assisting its developers to create secure, scalable, and fully-featured decentralized applications on Bitcoin.”

Innovations in BTCFi

Spiderchain aims to utilize Bitcoin natively across numerous EVM-compatible decentralized applications, diverging from Bitcoin's traditional non-fungible UTXO (unspent transaction output) model and embracing Ethereum's more flexible account model.

• Redefining Bitcoin's Role: This represents a gradual redefinition of Bitcoin’s image, which has primarily been seen as a digital gold-like reserve asset due to its lack of smart contract capabilities.

Unique Chain Design

The name "Spiderchain" reflects its unique design. According to Botanix’s documentation, the chain operates as a permissionless network of multisig wallets, secured by a randomized subset of participants known as orchestrators.

• Orchestrators' Role: Orchestrators must deposit BTC into multisig wallets as an escrow bond to participate in consensus and must run both a Bitcoin and Spiderchain node.

Decentralized Sequencer

From the outset, Spiderchain will employ a decentralized sequencer. By leveraging Bitcoin’s Taproot upgrade, Spiderchain can support a larger network of multisigs on the Bitcoin parent chain without the need for soft forks.

Airdrop Claims and Wallet Issues

Grass claims to have executed one of the most extensive airdrops in history, with the GRASS token being distributed without requiring any financial investment from users. However, the demand led to technical difficulties:

• Phantom Wallet: Experienced backend outages just six minutes after the airdrop launch.
• Backpack Wallet: The CEO hinted at challenges related to claims.
• Solflare Wallet: Reported “minor degradation” but managed to scale up automatically.

Jupiter, a popular Solana swap platform, acknowledged issues affecting users on Jup.ag when utilizing third-party wallets.

RPC Protocol Performance

While the struggles of wallets might suggest issues with RPC protocols, at least two Solana RPCs appeared to maintain stability:

• Helius: CEO Mert Mumtaz confirmed their RPCs were functioning well, indicating Phantom's issues were unrelated.
• Triton One: Co-founder Brian Long noted their RPCs experienced a temporary hit but recovered quickly.

Market Reaction and Token Dynamics

Despite the wallet issues, the Solana network itself did not show signs of degraded performance during the airdrop. The price of SOL slightly decreased from $177 to $175 amidst the airdrop news.

Users initially faced challenges in claiming the GRASS tokens due to the surge in activity. Centralized exchange markets reacted positively, pushing the token price up to $1.00 on KuCoin before it experienced a sharp decline.

With a total of 100 million tokens distributed, the airdrop represented a substantial financial impact, amounting to tens of millions of dollars in new tokens.

Purpose of the GRASS Token

The GRASS token is designed to support the Grass network, developed by Wynd Labs. The network incentivizes users to share their unused internet bandwidth, which is utilized for web data scraping. This data is crucial for training AI models. Wynd Labs asserts that their method yields superior data compared to traditional web scrapers, which may face blocks or provide inaccurate information.

Smooth Implementation

Muneeb Ali, co-founder of Stacks, expressed satisfaction with the upgrade's execution during a live session on X. Developers in New York monitored the process overnight to ensure everything went smoothly.

Enhanced Alignment with Bitcoin

The Nakamoto upgrade enhances the relationship between Stacks and Bitcoin by further binding Stacks blocks to Bitcoin blocks. Stacks operates on a consensus mechanism known as Proof of Transfer (PoX), where transactions and Stacks blocks are anchored to Bitcoin.

The upgrade strengthens this connection, meaning any reorganization (reorg) in the Stacks blockchain would now necessitate alterations in the Bitcoin blockchain. Rena Shah, VP of product and operations at Trust Machines, emphasized the significance of this change.

Increased Security through Bitcoin Dependency

This reliance on Bitcoin enhances the security of the Stacks blockchain. Bitcoin's robust security and resistance to reorgs—thanks to the considerable hash power of its miners—offer Stacks additional resilience. Attempting to reorg the Bitcoin blockchain is extremely difficult due to the high financial and computational costs involved, which indirectly shields Stacks from such vulnerabilities.

Shah remarked that this upgrade effectively renders Stacks reorg-proof, aligning with the ethos of Bitcoin. She also noted that it sets the stage for sBTC, Stacks’ version of Bitcoin.

Upgrade Features

The upgrade introduces several enhancements:

• Faster Transaction Processing: Stacks now generates blocks approximately every six seconds, improving usability for developers and users alike.

• Reduced Miner Profit Opportunities: The upgrade limits chances for miners to profit from rearranging or prioritizing transactions, leading to a fairer and more transparent network.

The Future of sBTC

Granite, a new DeFi protocol focused on Bitcoin and incubated by Trust Machines, recently emerged, aiming to tackle the limitations of custodial BTC offerings in DeFi. The upcoming app will utilize the sBTC Bitcoin bridge enabled by the Nakamoto upgrade.

Granite aims to enable BTC to interact directly with DeFi dapps in a decentralized manner. Users of sBTC will be able to lend, borrow, and earn yield on their Bitcoin while minimizing counterparty risk, unlike traditional custodial solutions or wrapped BTC assets.

Innovative Features of Granite

• No-Rehypothecation Model: User collateral remains fully controlled by the owner, preventing entanglement in protocol dependencies.

• Soft Liquidations: This feature allows for collateral to be liquidated only as needed to maintain solvency, preventing catastrophic losses.

• Risk-Tranched Liquidity Provisioning: Liquidity providers can choose their risk exposure by selecting junior or senior tranches, with a reserve protecting all LPs against market downturns.

Muneeb Ali highlighted that only about 1% of BTC has been utilized in DeFi due to security concerns. Granite's security-oriented approach could unlock the remaining 99% of BTC capital, driving new adoption waves.

Stacks continues to work on bringing sBTC to Solana, while Bitcoin is currently retesting its June highs above $71,100. Stacks’ native token, STX, has seen a 5% increase today, although it remains down about 50% from its all-time high.